IMPORT DUTIES

HC Deb 19 January 1976 vol 903 cc1077-96

10.40 p.m.

Mr. Nigel Spearing (Newham, South)

I beg to move, That an humble address be presented to Her Majesty, praying that the Import Duties (General) (No. 5) Order 1975 (S.I., 1975, No. 1744), dated 27th October 1975, a copy of which was laid before this House on 12th November 1975, in the last Session of Parliament, be annulled. This Prayer was to have been moved by my right hon. Friend the Member for Battersea, North (Mr. Jay), who, the House will be sorry to hear, is indisposed. It has been moved twice before—first by the present Secretary of State for Trade on 17th December 1973, and then by my right hon. Friend the Member for Battersea, North on 3rd February 1975. On both occasions, there was no vote against it by Members of the Labour Party. On the first occasion Labour voted for the Prayer. On the second occasion, a large number of Members abstained and those Labour Members who were present again voted for the Prayer.

This is the third of a series of changes in our import duty arrangements consequent upon our entry into the Common Market. The transitional terms of our accession to the Treaty of Rome have meant five stages of bringing our import duties into line with those of the Common Market. While some of our duties to countries outside the Common Market go up, others to countries inside the Community come down. After five adjustments, the transitional period is over.

These matters are complicated—the volume concerned is a long one—but the point is that the prices of many important products, particularly food, will go up. It is difficult to calculate the exact amount by which they will go up, because most are ad valorem duties—that is to say, they are given percentages of the value imported in wholesale markets. But it is clear that, as a result, prices for the retailer and the housewife will rise.

Some of these duties will come down—mainly those on horticultural products from the Common Market—but many others, particularly those on protein foods, will go up. As everyone knows who buys food, it is the important protein foods which are expensive and which have been particularly hit by our entry into the Common Market.

For example, the beef import duty—when we are allowed to import beef: there is a ban on imports of beef at the moment—will go up from 8 per cent. to 12 per cent. of its value. That on lamb will go up from 12 per cent. to 16 per cent. Those on tinned fruits, particularly from Commonwealth countries, will go up by various percentages: from 16 per cent. to 19 per cent. is a typical example. There will also be duties on goods coming from Commonwealth countries which are not associated, covering a wide range of raw materials and semi-manufactured goods. And it is a wide range. This volume has 70 pages.

That is serious enough for the House of Commons, but in terms of the mechanism of the Common Market, it is not only the import duties which count. On top of them there are import levies—not made by this House, because it often does not know what those levies are. I understand that there is at present a levy of £300 a ton on New Zealand cheese, nearly doubling its price to the housewife. These levies, in addition to the tariffs, exist to keep prices up and the common agricultural policy in being. That is one reason why the Prayer has been moved tonight.

When we were renegotiating our terms with the EEC we were told that there would be a full-scale re-appraisal of the CAP. That is in paragraph 29 of the Government's White Paper, Cmnd. 6003. We were told that decisions would be taken during the coming months, and the Report held out prospects of further progress on the lines advocated by the Government. But we know, alas, that this stocktaking document and the promise contained in that paragraph 29 have not materialised. Had they materialised, and had we as a quid pro quo for this unfortunate increase in tariffs had some modification of the CAP, that might have been an ameliorating factor, but we have not had that.

Instead, as I understand it—and perhaps the Minister will confirm this—whilst some of these tariffs go down, others go up, and the net effect is up, so we are not only saddled with increased tariffs under agreements entered into by the Conservative Government but we have not gained the changes in the CAP which the Government told us at the time of the referendum we were to obtain.

The Government's "Britain's New Deal in Europe" said that special arrangements had been made for sugar and beef. We know what has happened to the beef arrangements. They were for one year and they have been withdrawn, and now we are back to the CAP and intervention buying.

Mr. John Roper (Farnworth)

As I understand it, the Commission suggested it would withdraw the arrangement but our right hon. Friend the Minister of Agriculture, Fisheries and Food said he would make sure that we maintained the position on beef.

Mr. Spearing

I am glad to hear that our right hon. Friend is to try, but if the Commission proposes something, and if the initial arrangement was for one year, I very much fear—I hope I am wrong—that these arrangements will not proceed. We shall see. I should have thought that my right hon. Friend would consider a restructuring of the CAP to make a permanent change and allow this country to maintain its own premium beef system in perpetuity. I hardly dare to hope that we can get that.

The other point in the Government's proposals at the time of the referendum related to food prices. They said that food prices in the rest of the world had shot up and that our food prices were now no higher because Britain was in the Market than they would be if we were outside. That is not the view of my hon. Friend the Minister of State, because on 15th January his reply to a Question that I had tabled showed that prices were cheaper outside. He claimed that EEC wheat was cheaper than USA wheat, but in an article in the Financial Times of 9th January John Cherrington produced some devastating figures to show that, far from EEC prices being lower, wheat is £84 a ton in the Common Market and £67 a ton imported from the USA. The Government's figure is £20 more. The price of maize from the EEC is £75, while outside it is £60, which is £15 cheaper. The Government's figure is about the same. Either the Government are wrong in the reply that I received on 15th January, or John Cherrington is wrong. This correspondent of the Financial Times is a well-known agriculture journalist and he gives his figures clearly in his article.

He goes on to say: Today the prices of most food commodities on world markets are well below those ruling in the Community and those being proposed in next year's EEC package. This is an extremely serious matter for the United Kingdom, which has to import about 40 per cent. of its temperate food supplies. Not only have the referendum objectives not been achieved—and to some extent this is admitted by the Government—but the Government's figures are not those given by John Cherrington in the Financial Times.

In addition, we must ask the purpose of raising these tariffs. I shall not weary the House by going into the objectives which have been forced on us and which have led us to debate this matter tonight. I have reminded the House on two occasions that about 40 per cent. of the EEC common agricultural policy expenditure goes on milk. However, from the points made in last Thursday's debate it was clear that the British "pinta" was at least threatened. The Government have done something but we shall be in trouble if we are not careful.

I repeat, about 40 per cent. of the EEC expenditure on agricultural support goes on milk and, if we are not careful, that will give us trouble. About £70 million was spent on tobacco growing in Europe. We spent Friday debating the problems caused by smoking. About £1 million of public money goes to support the Health Education Council, but £9 million to £10 million of this country's money goes to support tobacco growing in the EEC.

We have recently debated devolution of power, but the power of this House and this country to decide matters has already gone. I suppose that if the Bishop of Kingston called the common agricultural policy evil and Mrs. Whitehouse called it obscene, they would hit the headlines in the Press. I believe that the common agricultural policy is evil and obscene, but hon. Members do not receive quite the same publicity.

The import duties are harming our horticulture industry and reducing the ability of this country to feed itself in terms of horticulture produce, despite the Government's policy of food from our own resources. However, the tariffs will go up on mainly protein foods which are needed especially for children and old people. It is the prices of those foods which will hit the housewife most.

There are a variety of ways in which the Government could, if they wished, at least consider asking the EEC whether we can delay introducing these tariffs this year. I am sorry that they have not done so. Today is the last opportunity to discuss this matter, to move this Prayer and to carry it. There are a number of Articles of the Treaty of Accession which could be invoked—for example, Articles 26, 108, 109 and 135. Indeed, it has been suggested in every previous debate on this subject that this should be done. It may be that now the situation has changed and my hon. Friend will say that they are not quite as appropriate as they might have been on previous occasions. However, there is one important factor which makes at least one of them significant.

When my right hon. Friend the Chancellor of the Exchequer returned from his overseas conferences he told us of the congratulations he had received, especially from members of the Common Market, about how he was dealing with inflation in Britain. Labour Members are only too well aware of the problems to which this gives rise inside the working population of this country. For example, there are discussions about the £6 limit and so on. If my right hon. Friend is to carry out his policy successfully this year—everyone wants him to do so: the Common Market, the country and the House—surely he can go to the Common Market and say, "Look, we do not want to put up food prices, especially the prices of important foods which we have traditionally imported from the Commonwealth". I hope that this argument, if no other, is a good one for invoking one or other of the Articles of the Treaty.

We have a massive problem with our balance of payments. We are operating on tick. There is no doubt that our balance of payments problem falls within the scope of many of the Articles.

I hope that the Government will consider these matters and that my hon. Friend, in reply, will confirm and perhaps hazard the figures for the increase in food costs which these tariffs will make necessary.

I should like to sum up in the words of a very good speech on 17th December 1973 from the Opposition Dispatch Box: We were assured during the negotiations and the debates on entry that the Common Market would be sympathetic to any difficulties facing this country as a result of entry. Surely now is the time to ask the other members. In order to help the Government convince the Common Market of the seriousness of our economic situation, and as a first step, as my right hon. Friend said, towards regaining sanity in our economic policy, we ask the House to support the motion."—[Official Report, 17th December 1973; Vol. 866, c. 1080.] Those were the words of my hon. Friend the hon. Member for Waltham Forest (Mr. Deakins) speaking as an official spokesman for the then Opposition. I know that he speaks for the Government tonight, but I hope he will agree that the points that I have made are valid. Therefore, in his words, I hope that the House will support this Prayer.

10.57 p.m.

Mr. Terence Higgins (Worthing)

It is perhaps ironic that, having spent four days debating devolution, we should now turn to a prayer concerned with an Order which takes a further step in the direction of integration with Europe.

The debates and votes that have just taken place have considerably curtailed the time available for this prayer. Therefore, I propose to speak at much shorter length than might normally be the case.

As the hon. Member for Newham, South (Mr. Spearing) pointed out, this is now something of a traditional occasion. The Under-Secretary of State who is to reply made his maiden speech on this matter at the Dispatch Box and the hon. Member for Newham, South has debated it on many occasions. I think that in a real sense we all miss the right hon. Member for Battersea, North (Mr. Jay), who is unable to be with us as he has been on former occasions, but I doubt whether I should find his arguments any more convincing now than I did last year or the year before.

It is worth pointing out that the situation has changed considerably from the last time we debated this Order. The Order, like its predecessors, takes us a further step towards eliminating tariff barriers within the Community and harmonising the common external tariff. It raises some of the same issues as before.

I found the arguments put forward by the hon. Member for Newham, South even less convincing tonight than on previous occasions—for example, the argument about the balance of payments. We all welcome—I do not wish to make any party point to the contrary—the improvement in the balance of payments indicated by the latest figures that came out last week.

Another point that has clearly changed the situation considerably is that last year's debate was largely preoccupied with the referendum. I have always been and remain against a referendum on anything. None the less, if we are to have a referendum, it is a good idea to win it. There is no doubt that the supporters of this Order—the opponents of the prayer moved by the hon. Member for Newham, South—won most decisively in the referendum.

The fundamental point still remains that not to go ahead with the proposals in this Order would be contrary to the treaty obligations that we have undertaken, and the obligations under this Order are part of the general package which was originally negotiated and subsequently renegotiated.

Mr. Ronald Bell (Beaconsfield)

Will my hon. Friend give way?

Mr. Higgins

I am sorry, no. I know that many hon. Members wish to speak in the debate. I rarely decline to give way. I hope that my hon. and learned Friend will forgive me if I do not give way to him.

Mr. Ronald Bell

It is usually quicker to give way.

Mr. Higgins

Then I give way to my hon. and learned Friend.

Mr. Ronald Bell

I am grateful to my hon. Friend. It is easier to enter the debate in his speech than outside it.

Is my hon. Friend suggesting that those of his opinion went into the referendum waving the banner of dearer lamb, beef and fish? Was it not suggested that when we went in the ridiculous common agri- cultural policy must be changed, and that one of the first things we would do would be to change it? If that is so, will my hon. Friend readjust his argument to those considerations?

Mr. Higgins

I do not think so. Those of us in favour of British entry have always recognised that there are pros and cons. Throughout the referendum campaign and at previous General Elections I put both sides of the argument, in marked contrast to the hon. Member for Newham, South, who asked the Minister to tell us what the effect on food prices would be. I think that the Minister should tell us, but I hope that he will also tell us the Order's overall impact on the cost of living. Last year we were told that it would reduce the rate of increase in the cost of living rather than increase it.

The balance of payments deficit with the EEC has been a matter of controversy for a considerable time. The latest figures, shown in the balance of trade analysis published last week, are very interesting. They show that between the third and fourth quarters of last year total exports to developed countries increased strongly, by 16 per cent., while deliveries to the EEC rose by 22 per cent. The value of imports from Western Europe increased by 5 per cent. over the same period, but in this group imports from the EEC rose by 11 per cent. That shows a change in the position, which is not unimportant. It reflects the increased confidence of British industry in exporting to the EEC, now that the issue has been finally decided by the referendum and the line which the Government have taken.

But if we are to take advantage of that it is vital that we should do everything we can to encourage investment. Despite the helpful effect of the referendum result, I still do not believe that the Government's policy to encourage investment is in any way satisfactory. It is extremely unsatisfactory. The proposals that the Government have been making are not likely to be very helpful.

I should like to ask the Minister one technical question. Last year when we considered this matter we were told that the changes in the protective elements of the revenue duties would be implemented by a separate Treasury Order. This year, I understand, the reverse is the case. The changes in the protective element of the duties are to be implemented in the main Order. Why has that change in procedure been made?

The hon. Member for Newham, South said that the effect on horticultural tariffs was very important. I do not believe that our horticulture industry is afraid of competition, but it is important that the competition should be fair. Many hon. Members have received representations suggesting that the balance of grants and so on within the Community is not fair. If that is so, I hope that the Minister will give an assurance that he will look into the matter. There is a strong case for ensuring that grants to the industry are given on a Community base that takes into account that there is now much greater trade in these products than there was before. Other concerns about horticulture have been expressed, but time does not allow me to go into them now.

My main point is that we have now had some experience of the reductions in tariffs under successive Orders. I hope that the Minister will tell us exactly what he estimates the effect of this has been. If, as the latest figures suggest, it has been to encourage exports more than to encourage imports, one should perhaps consider the actual timing of the whole operation. I believe that there are very considerable difficulties in encouraging the move towards freer trade both in the Community and outside.

One gets the impression that in the Common Market the Secretary of State for Trade—perhaps because of the position that he has previously taken on the Common Market issue—is not taking the kind of lead on the multinational trade negotiations that the House would expect him to take, not only on the question of tariff reductions but also on the question of the reduction of non-tariff barriers. That is very disappointing. Those are very important issues. We have seen very little evidence at all, so far, that the Secretary of State is prepared to take a lead in these European affairs. In particular, as the Minister will know, it is very important that a lead should be taken in getting more effective action against dumping.

The proposals in the Order are greatly to be welcomed, but again, as in the specific case I mentioned a moment ago, it is no good having a move towards freer trade unless, as the same time, we ensure that the competition resulting from that trade is on a fair and equitable basis.

Although we have made constant appeals from both the Dispatch Box and the Back Benches that the Secretary of State for Trade should take more effective action against dumping, we have not so far managed to persuade him that that is something he should pursue with enthusiasm.

That having been said—I have curtailed my remarks considerably—I believe it is right that this Order should be before the House. It would be wrong to pray against it, for the various reasons that I have put forward. In some respects they are not precisely the same as those advanced on previous occasions, but I believe that they are equally cogent now.

11.7 p.m.

Mr. Frank Hooley (Sheffield, Heeley)

I should like to make four points. First, we are discussing the taxation of food. My right hon. Friend the Chancellor of the Exchequer recently said that the wage restraint agreement that this Government had achieved with the Trades Union Congress was the envy of all other countries. He was probably right, but I doubt whether he would have had quite so easy a ride with the TUC if he had said bluntly that part of the Government's policy was to impose additional taxes on food, which is what this Order is about in so far as it relates to imported food.

Moreover, the taxes that we are imposing will not even go to our own Exchequer; they will go to Brussels, under the Common Market system, to be used, in the main, to finance the farmers of other member countries of the Community.

The second point on which the Chancellor of the Exchequer ought to be forthcoming concerns the fraud on the whole system. According to a report in The Guardian on 24th October 19[...] fraud on the EEC agricultural system in 1974 cost about £2 millions. In the first three months of 1975 frauds were setting back the taxpayer about £500,000. The report goes on to point out that farmers have been able to perpetuate these frauds on the common agricultural policy by claiming premiums for the conversion of dairy herds to beef while, in fact, retaining the dairy herds. Although agricultural officials say that they attempt to contain these claims, their success rate last year, according to the report only averaged about 12 per cent. Thirdly, I am concerned with the tax policy on food, and the mountains of unused and unsaleable food which have developed. Here I should like to quote from an article in the Financial Times: The cost of the present product mountains will be about billion, or £40 for every cow in the Community including those in the UK national herd. Every ton of butter sold to intervention costs FEOGA (the Common Market farm fund) about £1,000, and the two tons of skimmed milk powder which are its by-product also go on intervention at £500 per ton. The article goes on to say that the next cost to FEOGA of every ton of butter, plus its skim, taken into intervention is now about £1,300 a ton. As the article further points out, this means a subsidy of £200-plus for each cow producing this marginal surplus. If I thought that a £200 subsidy was available for every unemployed person in this country, I should be very much happier. However, we are now apparently dishing it out in the form of taxation on food, levied on our own people.

My fourth point relates to a recent report by the Consumers' Consultative Committee of the Common Market. I want to emphasise that this is not a consultative committee of the United Kingdom; it is the Common Market's own body, which is designed to look at consumer interests. I want to raise two matters in that report which concern the increase in food prices. The report says: These price increases for consumers have wider implications than just to reduce the level of income available to be spent on other products. First and foremost, the hardest hit are those families who have to spend a relatively large proportion of their income on food products. But in addition, higher food costs have an undesirable effect on wage costs and inflation which in turn leads to demands for higher farm prices by farmers concerned about their living standards. The implications of higher costs for the competitiveness of European industry"— and that includes British industry— especially at a time of serious unemployment and world recession, are unacceptable to European consumers as a whole, and we believe detrimental to the process of European integration. The second quotation from this report is not such a lengthy one: We do not neglect the problem of social justice in a humane Community that is faced by many inefficient farms, but we do not believe it to be in the long-term interest of the Community to finance the necessary social programmes by means of a consumer food tax. The Order that we are debating tonight is precisely that—a consumer food tax. It is part of a deliberate policy to push up food prices to the consumer and so subsidise both inefficient and efficient farmers. Until we face this problem squarely the Government will not have honoured the various commitments on which they held the referendum. The House should, if only as a gesture of protest, approve this Prayer and reject the Order.

11.12 p.m.

Mr. Neil Marten (Banbury)

When my hon. Friend the Member for Worthing (Mr. Higgins) rose to make his speech from the Dispatch Box he said that the Order was, in a way, a move towards integration and that it was a coincidence that it came just after the vote on devolution.

One of the curiosities of my party is that it voted against devolving legislative powers to a directly-elected Scottish Parliament, yet it is perfectly prepared to devolve upwards legislative powers to a directly-elected European Parliament. That dichotomy of view needs clearing up.

I want to take up the point raised by the hon. Member for Newham, South (Mr. Spearing) about the beef premium. The Minister of Agriculture gave evidence before the Scrutiny Committee last week and that evidence will be published as soon as the printers are ready. In his interrogation before that Committee the Minister said quite clearly that he would fight hard to retain the beef premium and not move over to the ridiculous intervention system—I do not believe that he used the word "ridiculous", but I did.

Last Thursday night we had a debate on the standard of milk. Again, the Government said that they were not satisfied with it and would try to make satisfactory arrangements. The point I make is that the Ministers failed to get what they wanted. We were told in the debates leading up to the referendum campaign that if Ministers did not do what Parliament wanted we could always sack them. If they do not get exactly what the House of Commons wants, we shall sack them. I am sure that Labour Members would agree with that.

I shall support this humble Prayer purely and simply because I am against putting and raising taxes on food. That is the effect of the Order. It is as simple as that. I shall not repeat the point.

I want to ask the Minister one question, to which he probably does not know the answer—I do not mean that unkindly, but it is rather a new question. It is about apples. I understand that the Common Market, with its surplus of Golden Delicious apples, wants to keep out the rather juicy Grannie Smiths from South Africa, Australia and New Zealand, which should start coming on to our market quite soon. They really are the apples that the British people want. I understand that the Dutch have approached M. Lardinois asking whether he can stop these apples coming in, because they want to get rid of their surplus Golden Delicious on to the British market. I hope that the Minister will be absolutely firm and have nothing to do with that.

What has got into the head of this curious Community that it wants to tell us what to eat? It is ruling on turkeys one minute, then trying to harmonise mayonnaise, and now it wants to stop us eating beautiful, juicy Australian Grannie Smith apples and make us eat those awful Golden Delicious, which are quite tasteless and—ugh!—horrible.

11.16 p.m.

Mr. John Roper (Farnworth)

There is one good thing about the debate, and that is that it can happen only, I think, twice more. As has already been said, this is the third of a series of Orders that take us through the various stages of removing the tariff barriers against the Community and raising some of our tariffs to the level of the common external tariff. I think that my hon. Friends will agree that we shall have two more stages of that, and therefore—thank goodness—there will be only two more of these debates. Indeed, I was not sure that there would be one this year. However, as has been said, this is the acceptance of a further stage.

Mr. Norman Buchan (Renfrewshire, West)

I find that a curious argument. Is my hon. Friend suggesting that he would rather see prices of the lot up in two goes? Would it not be better to have 20 debates and to impose increases of one-twentieth at a time?

Mr. Roper

My hon. Friend might prefer us to do it by a whole series of small changes, although I think he will agree that this would be extremely inconvenient for those involved in trade and commerce, and so forth, and that in the long term it would also be against the interests of Britain, because as well as the changes being made concerning these import duties there are the other changes being made in the Community which enable us to expand our exports to the Community, as they have expanded during the last 12 months. To prolong this period—

Mr. Brian Sedgemore (Luton, West)

A trade deficit with the Community.

Mr. Roper

A reduced trade deficit and an increase in the rate of our exports to the Community over the last year. My hon. Friend will know that our trade deficit with the Community was less than that of the previous year, because our exports to the Community rose at a much greater rate than did our imports.

The acceptance of the common agricultural policy, with an assurance that we would continue to work to support those in the Community to whom reference has already been made—including those in the Consumers' Consultative Committee who want to see changes such as the acceptance of the structure of the CAP—was made quite clear by my right hon. Friend the Minister of Agriculture in the debates on the Government's White Paper following the end of renegotiation. That was accepted in the referendum campaign. During the referendum debate the possibilities of increased costs were rightly pointed out. There was argument about what the long-term increases or decreases of world prices for food would be relative to those in the Community. At present, we are going through a fluctuation, as has been pointed out by the Financial Times. if any of my hon. Friends can tell me what the level of food prices will be one, two or three years hence, they are much wiser than either Mr. Cherrington, of the Financial Times, or anyone else.

Mrs. Gwyneth Dunwoody (Crewe)

Being a simple woman, I could not essay any guesses of that kind, but where are the changes coming in the agricultural policy to which my hon. Friend has just referred and which we discussed in the referendum campaign? As someone who sits as a member of the Agriculture Committee of the European Parliament, I can tell him that what is interesting about this year's discussions is that we have been discussing precisely the same forms of policies as were discussed last year. There has been absolutely no radical alterations in policies whatsoever.

Mr. Roper

I am sure that in the European Assembly my hon. Friend is doing all she can to ensure that the Assembly is taking what measures it can to support the views of my right hon. Friend the Minister of Agriculture, Fisheries and Food and others in the Community. Some hon. Members think that the only country that is dissatisfied with the common agricultural policy is the United Kingdom. I am sure that my hon. Friend the Member for Crewe (Mrs. Dunwoody) will agree that there are a number of other consumers in the Community, as my hon. Friend the Member for Sheffield, Heeley (Mr. Hooley) pointed out, who are dissatisfied with matters as they are at present.

We have the task of dealing with those parts of the policy that are not operating satisfactorily. It would be wrong for the House to reject the Order tonight. By so doing it would interrupt the process of integration with the Community, which the United Kingdom has accepted by referendum and which I believe we should now implement.

11.20 p.m.

Mr. Richard Body (Holland with Boston)

I have only one point to make, which I hope I shall be able to make in the space of two minutes, in view of the short time we have in which to debate this important Order.

It has been suggested, both in this debate and elsewhere, that when an import duty of a mere 16 per cent. is imposed it merely increases the price of food by 16 per cent. All the inquiries that I have made—I have done a fair amount of homework with importers, and so on—lead me to the conclusion that this is not so.

The import duty must be paid when the food reaches the port. The importer must pay it immediately. Nowadays, when he has to borrow the money at a very high rate of interest and service the loan from the bank or increase his capital, he must pass on that charge as best he can to the distributor and the wholesaler, who, in turn, must pass it on to the retailer, who, in turn, must pass it on to the housewife.

The result is that much more capital has to be employed by our importers, distributors and retailers of imported food than was previously the case. Thus, when a duty or tax of 16 per cent. is imposed—I prefer to use the word "tax", although I remember that in a debate this time last year the hon. Member for Farnworth (Mr. Roper) disputed the word—by the time it reaches the housewife, the resultant price increase is, not 16 per cent., but 26 per cent. or more. That is why items like tinned fruit and tinned salmon, which not so long ago were popular in this country, are becoming luxury items.

11.23 p.m.

The Under-Secretary of State for Trade (Mr. Eric Deakins)

I hope that the House will forgive me if I do not go into the details of the Order and the timetable. Given the time, I would have sought to do that. I would much rather go straight to the task of answering the points that have been raised by hon. Members.

My hon. Friend the Member for Newham, South (Mr. Spearing) spoke, first, about prices. As this theme was repeated by a number of other hon. Members, I shall set out the position as we see it. Some tariffs have risen as a result of the Order and others, as my hon. Friend fairly said, have gone down. My hon. Friend thought that, on balance, tariffs had risen. Where tariffs have risen, the scope for price increases that result from such increases in tariffs is limited to the very few cases where items are higher under the CCT than under the United Kingdom tariff itself—that is, where we adjust upwards—and, in particular, where supplies are obtained from developed Commonwealth countries such as Canada, Australia and New Zealand. The main items involved in the increase are lamb and canned fruit. The rate of increase in the tariff on 1st January 1976 represents only between 3 per cent. and 5 per cent. of the cif prices of most canned fruit prices. On lamb from New Zealand the duty increase will be no more than 3½ per cent. This represents an increase in our transitional duty from 12 per cent. to 16 per cent. That is offset by a downward shift in our United Kingdom specific tariff. We reckon that the food tariff will mean an extra £10 million on the cost of living, or roughly 0.1 per cent. on the cost of food. But if we take into account the downs and the tariff changes on food products, the overall effect will be minus £50 million, or roughly minus 0.1 per cent. These are marginal upward changes in respect of food and downward changes in terms of the overall impact on the cost of living.

If my hon. Friend or any hon. Member wants further details about the impact on lamb prices in the shops, I can say that we reckon the tariff increases are likely to mean a maximum of no more than 1p a pound. The increase could well be less than that. New Zealand lamb prices may not necessarily reflect these increases without taking account of their competitive situation in the market and the prices of other meats competitive with lamb.

We feel that these are the maximum increases possible. I have outlined the majority of food items that are likely to show any change in price that can be directly attributed to these tariffs. My hon. Friend referred to levies, but I must point out that this debate is concerned not with levies but with import duties.

My hon. Friend made a number of criticisms of the CAP. Many of those criticisms are shared by the Government. I think that they are also shared by the Opposition. My hon. Friend mentioned that we had not achieved much reform of the CAP. That is a matter for my right hon. Friend the Minister of Agriculture, Fisheries and Food. No doubt he will be going forth like a knight in shining armour to this year's Price Review to discuss these matters with the other eight member States. I am sure that my right hon. Friend will be trying to achieve some of the changes that many of us want by means of the price mechanism.

My hon. Friend's final and major point is that we might have taken some action to postpone these changes, but most of the major changes affecting our tariffs had already taken place. If we had gone to Brussels there would have been only a marginal effect, even if we had persuaded the Commission to agree to a postponement. But in view of the international trading climate, the Rambouillet declaration and the multilateral trade negotiation, for example, there would not have been any prospect of reaching agreement. Moreover, although our balance of payments situation is very serious there has been a distinct improvement in 1975 compared with 1974. That is something for which we should all be thankful.

An important point was raised by the hon. Member for Worthing (Mr. Higgins), which will be of interest to all those who have taken part in the debate—namely, our trading deficit with the EEC itself. For the first nine months of 1975 on a balance of payments basis—these are the latest figures we have—the deficit worsened to £1,759 million compared with £1,444 million in the previous year. If we exclude oil from the calculations, the deficit for the first nine months of 1974 was £1,302 million, whereas for the first nine months of 1975 it was £1,574 million. However, I must inform the House that the crude trade deficit on manufactured goods—we do not have the final balance of payments figure yet—improved from £602 million for the first 11 months of 1974 to £499 million for the similar period for 1975. There was some improvement in respect of manufactured goods, even though the overall position was undoutedly getting worse during the course of the year.

My hon. Friends say that they will press this issue to a vote. I sincerely hope that they will not do so. I remind them that before the referendum there was great public interest in these matters. Last year there was great concern about price increases, and that was reflected in my right hon. Friend's speech in the House. However, the position is now different. Some of us put these issues—for example, food prices and changes in tariffs—very forcibly to the British people. The people were made aware of them. I submit that the time to have

Question accordingly negatived.

defeated this measure was on 5th June 1975—

It being half-past Eleven o'clock, Mr. DEPUTY SPEAKER put the Question forthwith, pursuant to Standing Order No. 4 (Statutory Instruments, &c. (Procedure)).

The House divided: Ayes 64, Noes 107.

Division No. 25.]	AYES	[11.30 p.m.
Allaun, Frank	Hughes, Roy (Newport)	Richardson, Miss Jo
Ashton, Joe	Hutchison, Michael Clark	Roderick, Caerwyn
Atkinson, Norman	Kerr, Russell	Rodgers, George (Chorley)
Bain, Mrs Margaret	Kilfedder, James	Rooker, J. W.
Barnett, Guy (Greenwich)	Kinnock, Nell	Ross, William (Londonderry)
Bean, R. E.	Lambie, David	Sedgemore, Brian
Bell, Ronald	Lamond, James	Skinner, Dennis
Body, Richard	Latham, Arthur (Paddington)	Spearing, Nigel
Buchan, Norman	Litterick, Tom	Stallard, A. W.
Callaghan, Jim (Middleton & P)	Loyden, Eddie	Stewart, Donald (Western Isles)
Canavan, Dennis	McCusker, H.	Taylor, Mrs Ann (Bolton W)
Carson, John	Madden, Max	Thomas, Dafydd (Merioneth)
Cook, Robin F. (Edin C)	Marten, Neil	Thomas, Ron (Bristol NW)
Dunwoody, Mrs Gwyneth	Maynard, Miss Joan	Thorne, Stan (Preston South)
Evans, Gwynfor (Carmarthen)	Mikardo, Ian	Watt, Hamish
Evans, John (Newton)	Miller, Mrs Millie (Ilford N)	Wigley, Dafydd
Fernyhough, Rt Hon E.	Moate, Roger	Wise, Mrs Audrey
Flannery, Martin	Newens, Stanley	Woof, Robert
Fletcher, Ted (Darlington)	Noble, Mike
George, Bruce	Ovenden, John	TELLERS FOR THE AYES:
Hart, Rt Hon Judith	Paisley, Rev Ian	Mr. Frank Hooley and
Heffer, Eric S.	Parry, Robert	Mr. Bob Cryer.
Hoyle, Doug (Nelson)	Powell, Rt Hon J. Enoch

NOES
Anderson, Donald	Hamilton, James (Bothwell)	Oakes, Gordon
Armstrong, Ernest	Hardy, Peter	Palmer, Arthur
Bagier, Gordon A. T.	Harper, Joseph	Park, George
Bates, All	Harrison, Walter (Wakefield)	Pavitt, Laurie
Blenkinsop, Arthur	Howell, Denis (B'ham, Sm H)	Pendry, Tom
Boardman, H.	Hughes, Rt Hon C. (Anglesey)	Penhaligon, David
Brown, Hugh D. (Provan)	Hughes, Mark (Durham)	Perry, Ernest
Brown, Robert C. (Newcastle W)	Hunter, Adam	Phipps, Dr Colin
Buchanan, Richard	Jackson, Colin (Brighouse)	Roberts, Albert (Normanton)
Campbell, Ian	Jackson, Miss Margaret (Lincoln)	Roper, John
Cant, R. B.	John, Brynmor	Ross, Rt Hon W. (Kilmarnock)
Carmichael, Neil	Johnson, James (Hull West)	Rowlands, Ted
Cartwright, John	Jones, Alec (Rhondda)	Sandelson, Neville
Cocks, Michael (Bristol S)	Jones, Barry (East Flint)	Silkin, Rt Hon John (Deptford)
Conlan, Bernard	Jones, Dan (Burnley)	Silkin, Rt Hon S. C. (Dulwich)
Craigen, J. M. (Maryhill)	Judd, Frank	Small, William
Crawshaw, Richard	Lamborn, Harry	Smith, Cyril (Rochdale)
Cunningham, Dr J. (Whiten)	Leadbitter, Ted	Smith, John (N Lanarkshire)
Dalyell, Tam	Lestor, Miss Joan (Eton & Slough)	Snape, Peter
Davidson, Arthur	Lewis, Ron (Carlisle)	Stott, Roger
Davies, Denzil (Llanelli)	Luard, Evan	Strang, Gavin
Davis, Clinton (Hackney C)	Lyons, Edward (Bradford W)	Thomas, Mike (Newcastle E)
Deakins, Eric	McCartney, Hugh	Tinn, James
Dean, Joseph (Leeds W)	McElhone, Frank	Urwin, T. W.
Dormand, J. D.	MacFarquhar, Roderick	Wainwright, Edwin (Dearne V)
Duffy, A. E. P.	Mackenzie, Gregor	Walden, Brian (B'ham, L'dyw'd)
Dunn, James A.	Maclennan, Robert	Walker, Terry (Kingswood)
Dunnett, Jack	McMillan, Tom (Glasgow C)	Ward, Michael
Ellis, John (Brigg & Scun)	Mahon, Simon	White, Frank R. (Bury)
Ellis, Tom (Wrexham)	Marks, Kenneth	While, James (Pollok)
Ennals, David	Marquand, David	Whitehead, Phillip
Fitch, Alan (Wigan)	Marshall, Dr Edmund (Goole)	Whitlock, William
Ford, Ben	Mellish, Rt Hon Robert	Woodall, Alec
Garrett, John (Norwich S)	Millan, Bruce
Golding, John	Morris, Charles R. (Openshaw)	TELLERS FOR THE NOES:
Grant, George (Morpeth)	Mulley, Rt Hon Frederick	Mr. Donald Coleman and
Grant, John (Islington C)	Murray, Rt Hon Ronald King	Mr. David Stoddart.